Oakland sues feds over pot dispensary

MEDICAL MARIJUANA

Updated 10:51 pm, Wednesday, October 10, 2012

Photo: Lance Iversen, The Chronicle

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United States Attorney Melinda Haag, stood with Bay Area law enforcement representatives behind her, to announce the arrests of 13 members and associates of the 500 Block/C Street gang during a news conference in South San Francisco, Calif., Thursday, May 3, 2012. Three Immigration and Customs Enforcement agents were shot and injured during one of the raids Thursday is Petaluma Calif. less

United States Attorney Melinda Haag, stood with Bay Area law enforcement representatives behind her, to announce the arrests of 13 members and associates of the 500 Block/C Street gang during a news conference ... more

Photo: Lance Iversen, The Chronicle

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The Harborside Health Center along Embarcadero Road, in Oakland, Calif. on Wednesday July 11, 2012. Harborside Health Center, a medical marijuana dispensary was served with a notice taped to the front door reading, "Complaint for Forfeiture of Property" signed by U.S. Attorney Melinda Haag, and others. less

The Harborside Health Center along Embarcadero Road, in Oakland, Calif. on Wednesday July 11, 2012. Harborside Health Center, a medical marijuana dispensary was served with a notice taped to the front door ... more

Photo: Michael Macor, The Chronicle

Oakland sues feds over pot dispensary

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The city of Oakland took the unusual step Wednesday of filing a suit in an attempt to stop the federal government from seizing and closing down one of the largest medical marijuana dispensaries in the city.

Attorneys for Harborside Health Centersaid the suit against the federal government appears to be the first such action by a municipality on behalf of a marijuana dispensary.

The city states that federal attempts to seize the property, which began in July, contradicted promises by officials with the Obama administration who have said that dispensaries complying with state laws would not be targeted by federal agencies.

Melinda Haag, the U.S. attorney for Northern California, has contended that Harborside is not complying with California's law because it is a large-scale operation that processes millions of dollars worth of business.

Oakland leaders say the city, like many other jurisdictions, built an entire regulatory scheme based on the federal government's promise, only to find dispensaries under attack.

The city says protecting a private property housing a dispensary is a matter of patients' rights, public safety and city revenues. "If the federal government is successful with shutting down these businesses we have licensed and are complying with regulations and taxes, we will shift people into the black market," said City Attorney Barbara Parker, who announced the filing of the suit Wednesday.

"That will endanger their lives because they may not have safe, affordable access to medicine," said Parker, who was appointed to the city attorney position earlier this year and is in the running for the elected position this fall. "It will also exacerbate our crime and public safety crisis."

Parker said the case, which is being handled pro bono by the firm Morrison & Foerster, was authorized by the City Council in a closed-session meeting last week.

Harborside and the city's three other dispensaries brought in at least $1.4 million in business tax revenue to Oakland last year. In 2009, Harborside alone generated at least $21 million in sales, all of which were also subject to sales taxes, which are 8.75 percent in Alameda County.

"The federal government has made assurances that cities like Oakland, as long as we abided by state law, would not see these types of consequences," said Councilwoman Libby Schaaf. "We need to know whether we can rely on those types of statements."

Haag's office did not return multiple calls.

When the U.S. attorney's office announced forfeiture proceedings against Harborside in July, it relied on Harborside's alleged violation of federal drug law in asserting the government's right to seize the property at 1840 Embarcadero, along the Oakland Estuary.

Haag said that Harborside's size - the largest in the nation with an estimated 108,000 patients - made it a target.

Calling Harborside a marijuana "superstore," she said in a statement at the time, "the larger the operation, the greater the likelihood that there will be abuse of the state's medical marijuana laws and marijuana in the hands of individuals who do not have a demonstrated medical need."

Oakland's suit also alleges that the federal government's seizure attempts came after a five-year statute of limitations on forfeitures had lapsed. Harborside opened in 2006.

The only way the government could claim that the statute had not lapsed is if they claim they didn't know in 2006 about the existence of Harborside, said Cedric Chao, a partner at Morrison & Foerster in San Francisco.

"It would be impossible for the federal government to say they were unaware of these dispensaries in 2006," Chao said.

The property, which federal authorities said was valued at around $2 million, is owned by Ana Chretien, owner of ABC Security, one of the East Bay's most politically powerful security companies. Her company has had contracts with the city of Oakland, Alameda County and the Port of Oakland, including Oakland International Airport.

The U.S. started eviction proceedings on Harborside earlier this summer, said Chretien's attorney, Geoff Spellberg. He said Chretien would prefer to find a solution that satisfies all the parties involved.

Spellberg and Harborside's executive director, Stephen DeAngelo, said they were thrilled by Oakland's lawsuit.

"Compassion and common sense says that if you're going to give patients the right to use cannabis, you also need to provide them a way to legally access that medicine," he said. "The city, like us, is simply asking for the federal government to honor the policies they've already articulated."

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